Trump bars 5 more Chinese companies from buying US parts

The move came just days ahead of key talks between President Donald Trump and Chinese leader Xi Jinping

The US Commerce Department has banned five more Chinese entities from buying US components just a week ahead of a high-stakes meeting between President Donald Trump and Chinese leader Xi Jinping at the G-20 summit this month, where lingering trade differences are to be discussed.

According to a filling, the list includes four companies and a research institute, namely AMD’s Chinese joint-venture Higon, Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, Sugon and Wuxi Jiangnan Institute of Computing Technology, with the department claiming that activities of these companies “pose a significant risk of being or becoming involved in activities contrary to the national security and foreign policy interests of the United States.”

The move follows similar blacklisting of Chinese telecommunications giant Huawei Technologies Co. last month, blocking it from buying US software and components. As a result, the Huawei action has raised fears that a trade war launched last year is turning into a broader economic conflict focused on cutting off China from US technology while also forcing US companies to shift their supply chains out of China, especially when it comes to super-computing.

The current actions however also illustrate some of the competing tensions inside the administration on China. Earlier this week the US president announced he and Xi would meet on the sidelines of the June 28-29 Group of 20 summit in Japan in an effort to restart trade talks that broke down last month. In an apparent 'peace gesture' the White House on Friday confirmed it has postponed a speech critical of China’s human rights record by Vice President Mike Pence that had been scheduled for Monday as a result of progress in the discussions with Beijing, with Trump and Pence deciding to deliver the speech after Trump and Xi's talks in Japan.

Commerce Department's ban and announcement that the aforementioned 5 entities listed raise national security concerns because their supercomputers were being developed for military uses or in cooperation with the Chinese military, tell a different story. This shows that while some are eager to see Trump reach a deal with Xi that would remove a drag on the US economy going into the 2020 election cycle others in the administration are more intent on proceeding with a multifaceted crackdown on China.

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